| Q: Who is a non-resident
Indian? |
| |
A:
An Indian citizen who stays abroad for employment/carrying
on business or vocation outside India or
stays abroad under circumstances indicating
an intention for an uncertain duration of
stay abroad is a non-resident. (Persons
posted in UN organisations and officials
deputed abroad by Central/state governments
and public sector undertakings on temporary
assignments are also treated as non-residents).
Non-resident foreign citizens of Indian
origin are treated on par with non-resident
Indian citizens (NRIs). |
| |
|
| Q: Who is a person
of Indian origin? |
| |
A:
For investments in immovable properties
A foreign citizen (other than a citizen
of Pakistan, Bangladesh, Afghanistan, China,
Iran, Bhutan, Sri Lanka, or Nepal) is deemed
to be of Indian origin if, (i) he held an
Indian passport at any time, or (ii) he
or his father or paternal grand-father was
a citizen of India by virtue of the Constitution
of India or the Citizenship Act, 1955 (57
of 1955). |
| |
|
| Q: What is an
OCB? |
| |
A:
Overseas Corporate Bodies (OCBs) are bodies
predominantly owned by individuals of Indian
nationality or origin resident outside India
and include overseas companies, partnership
firms, societies and other corporate bodies
which are owned, directly or indirectly,
to the extent of atleast 60 per cent by
individuals of Indian nationality or origin
resident outside India as also overseas
trusts in which atleast 60 per cent of the
beneficial interest is irrevocably held
by such persons. Such ownership interest
should be actually held by them and not
in the capacity as ~ nominees. The various
facilities granted to NRIs are also available
with certain exceptions to OCBs so long
as the ownership/beneficial interest held
in them by NRIs continues to be atleast
60 per cent. |
| |
|
| Q: Are OCBs required
to produce any certificate regarding ownership/beneficial
interest in them by NRIs? |
| |
A:
Yes. In order to establish that the ownership/beneficial
interest in any OCB held by NRIs is not
less than 60 per cent, the concerned body/trust
is required to furnish a certificate from
an overseas auditor/chartered accountant/certified
public accountant in form OAC where the
ownership/beneficial interest is directly
held by NRIs, and in form OAC 1 where it
is held indirectly by NRIs and further that
such ownership interest is actually held
by them and not in the capacity as nominees. |
| |
|
| Q: What are the
various facilities available to NRIs/OCBs? |
| |
A: NRIs/OCBs are granted
the following facilities :
Maintenance of bank accounts in India.
Investments in securities/shares of, and
deposits with, Indian firms/companies.
Investments in immovable properties in India.
INVESTMENT IN IMMOVABLE PROPERTY
|
| |
|
| Q: Do non-resident
Indian citizens require permission of Reserve
Bank to acquire residential/commercial property
in India? |
| |
A:
No. An Indian citizen resident outside India
does not require any permission to acquire
any immovable property in India other than
agriculteral/plantation property or a farm
house. However the purchase consideration
should be met either out of inward remittances
in foreign exchange through normal banking
channels or out of funds from NRE/FCNR accounts
maintained with banks in India. |
| |
|
| Q: Do foreign
citizens of Indian origin require permission
of Reserve Bank to purchase immovable property
in India for their residential use? |
| |
A:
Reserve Bank has granted general permission
to foreign citizens of Indian origin, whether
resident in India or abroad, to purchase
immovable property other than agriculteral
land/farm house/plantation property, in
India. They are, therefore, not required
to obtain separate permission of Reserve
Bank or file any declaration. |
| |
|
| Q: In what manner
the purchase consideration for the immovable
property should be paid by foreign citizens
of Indian origin under the general permission? |
| |
A:
The purchase consideration should be met
either out of inward remittances in foreign
exchange through normal banking channels
or out of funds from any non resident accounts
maintained with banks in India. |
| |
|
| Q: Can such property
be sold without the permission of Reserve
Bank? |
| |
A:
Yes. Reserve Bank has granted general permission
for sale of such property. However, where
the property is purchased by another foreign
citizen of Indian origin, funds towards
the purchase consideration should either
be remitted to India or paid out of balances
in non-resident accounts maintained with
banks in India. |
| |
|
| Q: Can sale proceeds
of such property if and when sold be remitted
out of India? |
| |
In the event of sale
of immovable property other than agricultural
land/farm house/plantation property in India
by a person resident outside India, who
is a citizen of India, or a person of Indian
origin, the authorized dealer may allow
repatriation of the sale proceeds outside
India, provided all the following conditions
are satisfied:-
the immovable property
was acquired by the seller in accordance
with the provisions of the Exchange Control
Rules/Regulations/Law in force at the time
of acquisition, or the provisions of the
Regulations framed under the Foreign Exchange
Management Act, 1999; the sale takes place
after three years from the date of acquisition
of such immovable property of from the date
of payment of final installment of consideration
for its acquisition, whichever is later;
the amount to be repatriated
does not exceed(a) the amount paid for acquisition
of the immovable property in foreign exchange
received through normal banking channels
or out of funds held in foreign currency
non-resident account or (b) the foreign
currency equivalent, as on the date of payment,
of the amount paid where such payment was
made from the funds held in non-resident
external account for acquisition of the
property; and in the case of residential
property, the repatriation of sale proceeds
is restricted to not more than two such
properties.
In all other cases prior permission 9
RBI is required |
| |
|
| Q: Can foreign
citizens of Indian origin acquire or dispose
of residential property by way of gift? |
| |
A:
Yes. Reserve Bank has granted general permission
to foreign citizens of Indian origin to
acquire or dispose of immorelde properties
other than agricultural land/farmhouse/plantation
property by way of gift from or to a relative
who may be an Indian citizen or a person
of Indian origin whether resident in India
or not. |
| |
|
| Q: Can NRI's/PIO's
rent out the properties (residential/commercial)
if not required for immediate use? |
| |
A:
Yes. Reserve Bank has granted general permission
for letting out any immovable property in
India. The rental income or proceeds of
any investment of such income is eligible
for repatriation |
| |
|
| Q:Can NRIs obtain
loans for acquisition of a house/flat for
residential purpose from financial institutions
providing housing finance? |
| |
A:
Reserve Bank has granted general permission
to certain financial institutions providing
housing finance e.g. HDFC, LIC Housing Finance
Ltd., etc., to grant housing loans to non-resident
Indian nationals for acquisition of a house/flat
for self occupation subject to certain conditions.
The purpose of loan margin money and the
quantum of loan will be at par with those
applicable to housing loans to residents.
Repayment of loan should be made within
a period not exceeding 15 years out of inward
remittances or out of funds held in the
investor's NRE / FCNR / NRO Accounts. |
| |
|
| Q: Can authorised
dealer grant loans to NRIs for acquisition
of a flat/house for residential purposes? |
| |
A:
Authorised dealers have been granted permission
to grant loans to non-resident Indian nationals
for acquisition of house/flat for self-occupation
on their return to India subject to certain
conditions Repayment of the loan should
be made within a period not exceeding 15
years out of inward remittance through banking
channels or out of funds held in the investors'
NRE/FCNR/NRO accounts. |
| |
|
| Q: Can authorized
dealer grant housing loan to non-residents
of Indian originality where he is a principle
borrower with his resident close relative
as a co-obligent / guarantor or where the
land is owned jointly by such NRI borrower
with his resident close relative? |
| |
A:
Yes. However, in such cases, the payment
of margin money and repayment of the loan
installments should be made by the NRI borrower. |
| |
|
| Q: What are the
guidelines for acquisition of agricultural
land / plantation property / farmhouse by
NRIs and foreign citizens of Indian origin? |
| |
A:
All requests for acquisition of agricultural
land / plantation property / farm house
by any person resident outside India may
be made to The Chief General Manager, Reserve
Bank of India, Central Office, Exchange
Control Department, Foreign Investment Division
(III), Mumbai 400 001. |
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